AudioCodes Reports First Quarter 2020 Results

AudioCodes Reports First Quarter 2020 Results

Apr 27, 2020


First Quarter Highlights

  • Quarterly revenues increased by 11.7% year-over-year to $52.0 million;
  • Quarterly service revenues increased by 25.2% year-over-year to $17.7 million;
  • Quarterly UC-SIP revenues increased more than 20% year-over-year;
  • GAAP results:
    • Quarterly GAAP gross margin percentage was 65.9%;
    • Quarterly GAAP operating margin percentage was 11.8%;
    • Quarterly GAAP net income was $5.3 million, or $0.17 per diluted share;
  • Non-GAAP results:
    • Quarterly Non-GAAP gross margin percentage was 66.1%;
    • Quarterly Non-GAAP operating margin percentage was 15.2%;
    • Quarterly Non-GAAP net income was $7.8 million, or $0.25 per diluted share;
    • Net cash provided by operating activities was $6.8 million for the quarter.
    • AudioCodes declared a semiannual cash dividend of 13 cents per share. The dividend, in the aggregate amount of $3.9 million, was paid on March 4, 2020

Details

Lod, Israel – April 27, 2020 - AudioCodes (NASDAQ: AUDC) Press Release

AudioCodes, a leading vendor of advanced voice networking and media processing solutions for the digital workplace, today announced financial results for the first quarter ended March 31, 2020.

Revenues for the first quarter of 2020 were $52.0 million compared to $46.6 million for the first quarter of 2019.

Net income was $5.3 million, or $0.17 per diluted share, for the first quarter of 2020, compared to $3.0 million, or $0.10 per diluted share, for the first quarter of 2019.

On a Non-GAAP basis, net income was $7.8 million, or $0.25 per diluted share, for the first quarter of 2020 compared to $5.5 million, or $0.18 per diluted share, for the first quarter of 2019.

Non-GAAP net income excludes: (i) share-based compensation expenses; (ii) amortization expenses related to intangible assets; (iii) expenses or income related to revaluation of an earn-out liability in connection with the acquisition of Active Communications Europe; (iv) financial income or expenses related to exchange rate differences in connection with revaluation of assets and liabilities in non-dollar denominated currencies and (v) non-cash deferred tax expenses. A reconciliation of net income on a GAAP basis to a non-GAAP basis is provided in the tables that accompany the condensed consolidated financial statements contained in this press release.

Net cash provided by operating activities was $6.8 million for the first quarter of 2020. Cash and cash equivalents and long- and short-term bank deposits were $74.2 million as of March 31, 2020 compared to $71.9 million as of December 31, 2019. The increase in cash and cash equivalents, long- and short-term bank deposits was the result of cash provided by operating activities offset, in part, by the use of cash in March 2020 for the payment of a cash dividend.

“We are pleased to report strong financial results for the first quarter of 2020,” said Shabtai Adlersberg, President and Chief Executive Officer of AudioCodes. “We continued to enjoy good business momentum in the quarter in both the enterprise and the service providers’ space. We experienced growth in all of the major market segments in which we participate, including the UCaaS market, the Contact Center market and the service providers’ all-IP migration market. As a result, we continued to improve our financial performance year-over-year with respect to both revenues and profits.  Our continued positive operating cash flow and the improved operational efficiency as exhibited by the increase in the Non-GAAP operating margin percentage to 15.2% underscores our financial success.”

”Turning to the impact of the COVID-19 pandemic, around the middle of the first quarter we experienced difficulties in the manufacturing of our hardware products in China. We were able to quickly recover from the associated delay and were able to ship all of our products as planned during the quarter. In compliance with the Israeli regulations meant to cope with the COVID-19 crisis, we have moved the majority of HQ employees to a work-from-home basis, a transition that went smoothly.  Based on business activity during the 1Q20 and past few weeks, we believe that we should be able to meet our original targeted performance plan for the full year and the second quarter.” added Mr. Adlersberg.

“On a positive note, we have seen increased market activity and demand in two of our leading business activities: the Microsoft Teams application for UCaaS and the rapidly growing trend of work-from-home (WFH). Demand in both areas was driven by the stay-at-home and remote work/social distancing policies dictated by steps taken by governments worldwide to manage the COVID-19 pandemic crisis. Revenue related to MS Teams ecosystem grew above 80% year over year, and newly created opportunities more than doubled year over year. On March 23rd we announced AudioCodes Live for MS teams which provides a managed service to fully voice-enable Teams deployments. The core service includes Teams Direct Route connectivity, Microsoft tenant management, user lifecycle management and several more services. Noteworthy also is the progress made in our Voice.ai business where we introduced Meeting Insights, a productivity enhancement software tool for group collaboration, and the One-Click Telephony Gateway, a SaaS offering allowing to connect Google Dialogflow based virtual agents to telephony, a rapidly growing use case in the Covid-19 era. Looking forward, we are confident in our ability to continue to expand our business in 2020 and beyond. While the full impact of COVID-19 is still uncertain and remains a global challenge, thus far any immediate business setbacks we have encountered have been balanced by new business opportunities presented to us. We plan to continue our investment in future offerings, and focus on the return on investment to our shareholders," concluded Mr. Adlersberg.

Cash Dividend 

On February 4, 2020, the Company declared a cash dividend of $0.13 per share. The dividend, in the aggregate amount of $3.9 million, was paid on March 4, 2020 to all of the Company’s shareholders of record on February 18, 2020.

Conference Call & Web Cast Information

AudioCodes will conduct a conference call at 8:30 A.M., Eastern Time today to discuss the Company's first quarter of 2020 operating performance, financial results and outlook. Interested parties may participate in the conference call by dialing one the following numbers:

  • United States Participants: +1 (877) 407-0778
  • International Participants: +1 (201) 689-8565

The conference call will also be simultaneously webcast. Investors are invited to listen to the call live via webcast at the AudioCodes investor website at www.audiocodes.com/investors-lobby

 

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